Abstract
This paper has the aim to deep understand the typical problems of the Corporate Governance of China's State-Owned Enterprises (SOEs) and how, during the years the role of the Chinese government is changed. In particular it will discusses Chinese corporate governance in this narrow sense and attempts to explain the political core function of Party Organization. Moreover it will analyze a real case: “Sinosteel Corporation”. This company was created and projected by the Chinese government with the aim to be the leader in its sector. Its corporate governance is deeply influenced by the party consequently by the Chinese government, which contributed to its establishment and growth through several government-subsidies.

Key words: China’s SOEs, Governance Structure, the CCP organization, internal control mechanism, Sinosteel.

Abbreviations: CCP, China Communist Party; SOEs, State-Owned Enterprises; CICSC, China Internal Control Standards Committee; SASAC, State-owned Assets Supervision and Administration Commission; PSC, Party Standing Committee; CPCC, China Party Central Committee;
Introduction
The definition of corporate governance in China refers to the system that regulates the multiple relationships between all the parties with interests in a business organization, typically underlying the shareholders as a predominantly important group. However in practise corporate governance focus mainly on the agency problems in particular within two kinds of firms. The state owned enterprise (SOEs), above all after the Company Law transformed them into one of the corporate forms. The other type of firms are listed companies, which under the Company Law must be companies limited by shares (CLS). One fundamental dilemma of the Chinese Corporate Governance stems from the strict state’s policy of preserving full ownership interest in the firms in several sectors.